Emerging Stocks Advance on Ukraine Deal as Ruble Rallies

By Julia Leite, Lyubov Pronina and Andras Gergely -
Apr 17, 2014

Emerging-market stocks rose for a
second day after diplomatic leaders reached a deal aimed at
defusing the crisis in Ukraine. Russia’s ruble posted the
biggest advance among the world’s major currencies.

The MSCI Emerging Markets Index added 0.7 percent to
1,009.22. The Micex Index of equities extended a two-day advance
to 1.4 percent in Moscow, the ruble jumped the most among 31
global currencies tracked by Bloomberg and Ukraine’s hryvnia
posted the longest rally since August. India’s 10-year sovereign
bonds climbed the most in four months after the government
auctioned debt at lower yields than investors estimated.

U.S. Secretary of State John Kerry and Catherine Ashton,
the European Union’s foreign-policy chief, gathered in Geneva
today with foreign ministers from Russia and Ukraine for more
than six hours. Their agreement called for all illegal armed
groups in Ukraine to be disarmed, all seized buildings to be
returned to their legitimate owners and occupied public places
to be vacated. Kerry said that unless the Russian government
starts acting on the accord, sanctions will follow.

“Headlines from Ukraine are going to continue to bring
volatility, but I don’t expect Ukraine to become a market event
unless there is true Western military action,” James Paulsen,
the Minneapolis-based chief investment strategist at Wells
Capital Management, which oversees about $360 billion in assets,
said by phone. “If we stick with economic sanctions, I don’t
think it’s a big event. It fades away.”

The Micex advanced for a second day, led by OAO Sberbank,
while the ruble trimmed this year’s slide against the dollar to
7.7 percent. The hryvnia rallied 1.3 percent, extending its
appreciation this week to 12 percent.

India’s benchmark stock index rallied for the first time in
four days. Tata Motors Ltd. (TTMT), the owner of Jaguar Land Rover,
soared the most in five months. ICICI Bank Ltd. (ICICIBC), the country’s
second-biggest lender, advanced to its highest level since 2010.
The yield on India’s 8.83 percent notes due November 2023 slid
12 basis points, or 0.12 percentage point, to 8.85 percent in
Mumbai, the biggest drop since Dec. 18, prices from the central
bank’s trading system show.

Chinese stocks declined as energy producers and financial
shares dropped, overshadowing an advance by technology
companies. The yuan advanced the most in more than a week after
the government said it will lower reserve-requirement ratios at
some rural banks, fueling speculation authorities will act to
stabilize growth.

Brazil’s Ibovespa advanced for a second straight day as
steelmaker Gerdau SA (GGBR4) led a rally by commodity producers after
economic data indicating growth in the U.S. pushed oil and metal
prices higher.